888 responds to FY23 downturn with immediate action

The times are fraught for 888 Holdings, a company that has curtly fended several attempts to take over its assets, and has been on a course to regain its financial fettle. Yet, this has not happened in time for the Financial Year 2023, which saw the company report an 8% year-over-year decline in group revenue.

However, 888 is not giving in to despair either, as there are already changes in progress to make sure that the group is back on track. Group Chief Executive Officer, Per Widerström, stated that the business's financial standing must improve, and that a process of streamlining operations to create "a more agile, leaner, and effective structure" is already underway.

"These plans support material value creation and significantly higher profits over the coming years," he explained, confirming that 888 will be working to swing back to profitability in the long term and seek a sustainable business model.

In the meantime, the group revenue hit £1.7bn in 2023, down from £1.85bn in 2022. A big hit was taken by the company’s dotcom operations, which lost £80m in revenue. 888 once again cited the pressure of changes in the gambling law in the United Kingdom and a bigger focus on safer gambling measures – something that the group had accepted and welcomed, but that still needed calibration of its business strategy.

In light of these changes, UK online revenue actually declined to £658m during the report period, down 8% from the £717m cited in 2022. Safer gambling measures actually took out 18% of the average revenue per customer in the online sector in the United Kingdom.

Yet, the United Kingdom’s EBITDA is expected to be much higher than last year’s, indicating that mitigation processes have already begun. The impact of safer measures should stop biting as hard into corporate results by February, the company estimates.

Meanwhile, the company has been trimming more fat and excess, with the group boasting £30m in global cost savings last month alone. Internationally, the company reported £517m for its global business. Interestingly, however, the company saw double-digit growth in both Spain and Italy, which are core company markets and which, despite their tough regulatory regimes, have been of the utmost importance to the group’s financial well-being.

888’s ability to navigate those markets is indicative of its ability to come back to the United Kingdom and adjust to the new consumer and regulatory realities.

"I have been working hard with the board, our strengthened executive team, and the talented people across the business to refine our strategic framework, which is being translated into a value creation plan, and am confident that we are poised to deliver deleveraging and strong shareholder returns in the coming years," Widerström added.

The company is also looking to achieve £150m synergy savings in 2024, which will give it a further boost. However, news of the financial results sent the company’s stock down 9% on Wednesday on the London Stock Exchange.

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